Chapter 27
When a Good Thing Goes Bad
Anne P. Hubbell
Case Overview
This case centers on a relationship between Jose Ambrose, CEO of Stolltech, and a researcher of one of Stolltech’s pharmaceutical products, Dr. Karen Morgan. They have become friends and Dr. Morgan has been conducting research on Cyclofam, a product used to treat Cystic Fibrosis patients. She hopes to prove that it can increase the lifespan of these patients but an examination of her data tells her that Cyclofam may in fact be decreasing their lifespan. She brings the data to Jose’s attention and Jose talks with his director of research, Dr. Carl Duncan, about the issue. Dr. Duncan claims that Dr. Morgan has not been following the research protocol that was established which can be crucial to the validity of any study. Jose leaves Dr. Duncan in charge of dealing with Dr. Morgan and Dr. Duncan rudely cancels funding to Dr. Morgan’s research. Dr. Morgan goes to the press with her findings and the loss of funding and the press responds with a severely negative article regarding Stolltech. Stock prices of Stolltech fall drastically and a potential hostile takeover is looming. Jose Ambrose calls together his key associates, and begins to talk about what the company can do to weather the crisis.
Learning Objective
This case illustrates the difficulty in balancing personal relationships with organizational issues, further, it demonstrates the complexity and stress involved with being a boundary spanner and handling intraorganizational and interorganizational relationships.
Keywords and Definitions
Autoimmune disease—chronic diseases wherein the body attacks itself. Examples include diabetes, thyroid disease, and lupus.
Cystic fibrosis—Glanze, Anderson, and Anderson in The Mosby Medical Encyclopedia (1992) describe it as follows:
an inherited disorder of the glands that secrete through ducts…it causes the glands to make very thick releases of mucus…Cystic fibrosis is often diagnosed in infancy or early childhood…Because there is no known cure, treatment is directed at preventing lung infections, which are the most common cause of death. Drugs that thin the mucus, lung, drugs, and mist tents are used to help turn the thick mucus more liquid. Chest physical therapy, draining and breathing exercises, can also dislodge fluids. Antibiotics may be used to prevent infections. When the pancreas does not release enough enzymes, pancreatic enzyme supplements must be taken at each meal…Life expectancy in cystic fibrosis has improved greatly over the past few decades. With early diagnosis and treatment, most patients can expect to reach adulthood.” (p. 226)
Formulary—hospitals and HMOs have lists of pharmaceuticals that are preferred by those organizations. A preferred product is one that costs less money for the organization and/or is believed to be a superior product to its competitors. When a product is not on one of these formularies it is used much less than if it is on the formulary and the company that makes the product will lose projected or actual income from the product.
Health Management Organization (HMO)—focus is on affordable health care by negotiating costs with pharmaceutical companies and health providers (physicians and hospitals). They have become very powerful players in the U.S. health care arena.
Protocol—in medical research these are the “rules” of how the research will be conducted. Usually they are established before the research begins and are based on previous research. So, for example, in the current case, Dr. Duncan wants all of the patients to be similar in weight, etc., because he knows that previous research with differing weights, etc., proved inconclusive. It is easier to say that what you have found is because of the pharmaceutical product if you control for other potential factors, i.e., metabolism or other potential disease states.
Validity—when you are measuring what you intend to measure.
Key Case Concepts
Boundary spanner—a boundary spanner is a person who is a member of an organization and communicates with the environment surrounding the organization. Examples include salespersons and individuals in public relations positions.
Downsizing—also referred to as “rightsizing.” Like the word, layoff, it means to let individuals in an organization go. It is often done on a large scale when an organization is in financial trouble. The first phases of it usually entail “buyouts” where employees are offered severance packages that include salary and sometimes benefits for a specified amount of time. Sometimes employees are also offered early retirement packages. Others are simply let go, often with a small severance package.
Interorganizational relationships—relationships between two or more companies. It can also be between an organization and an individual, such as in the current case.
Intraorganizational relationships—relationships among individuals within an organization.
Takeover—when one organization buys another company without the company wishing to be bought. Often when a company is not doing well it is in a position to be taken over in such a way. Takeovers usually result in new management and often the downsizing of organizational employees.
Discussion Questions
1. Why are relationships within organizations so important?
2. What are the benefits and risk of business relationships that become personal (like Jose Ambrose and Dr. Karen Morgan’s)?
3. What more could Jose have done?
4. What could Jose have done differently?
5. What could Dr. Karen Morgan have done differently?
6. What could Jose, Dr. Duncan, Dr. Morgan, and Betty do now?
7. What type of interorganizational linkage(s) were there between Dr. Karen Morgan and Jose Ambrose?
8. How did this relationship/linkage change?
9. Is it possible to have different types of interorganizational linkages at the same time? Is this desirable or not?
10. How do interorganizational linkages benefit organizations?
11. How can interorganizational linkages hurt organizations?
12. What type of interorganizational linkage did Dr. Duncan have with Dr. Morgan?
13. What type of interorganizational linkage did Betty Fields have with the media?
14. Is Betty a boundary spanner? Why?
15. What are Betty’s roles as a boundary spanner?
References and Resources
Adams, J. S. (1980). Interorganizational processes and organization boundary activities. Research in Organizational Behavior, 2, 321–355.
Eisenberg, E. M., & Goodall, H. L. (2001). Organizational communication: Balancing creativity and constraint (pp. 291–293). Boston: Bedford/St. Martin’s.
Eisenberg, E. M., Farace, R., Monge, P., Bettinghaus, E., Kurchner-Hawkins, R., Miller, K., &
Rothman, L. (1985). Communication linkages in interorganizational systems: Review and synthesis. In B. Dervin & M. Voight (Eds.), Progress in communication sciences, 6 (pp. 231–238). Norwood, NJ: Ablex.
Glanze, W. D., Anderson, K. N., Anderson, L. E. (1992). The Mosby medical encyclopedia (pp. 226). New York: Plume, a division of Penguin Books.
Miller, K. (1999). Organizational communication: Approaches and processes (2nd ed.), (pp. 267–271). Belmont, CA: Wadsworth
Barringer, B. R., & Harrison, J. S. (2000). Walking a tightrope: Creating value through interorganizational relationships. Journal of Management, 26, 367–381.
Harter, L. M, & Krone, K. J. (2001). The boundary-spanning role of a cooperative support organization: managing the paradox of stability and change in non-traditional organizations. Journal of Applied Communication Research, 29, 248–278.
Taylor, T., & Doerfel, M. J. (2003). Building interorganizational relationships that build nations. Human Communication Research, 29, 153–182.
Williams, P. (2002). The competent boundary spanner. Public Administration, 80, 103–125.
Web Resources
Internet Drug News INC: <http://www.coreynahman.com/>
Pharmaceutical Rep Associations: <http://www.pharmrep.com/resources/associationlist.asp?ca>